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Saturday, September 30, 2006Forward to CIGNA, Senators & CongressHi Dan, Would you mind if I forwarded your letters to Cigna and their responses to my local us senators and congress people? If I do, I could cc it to you as well. Thanks Name Withheld Hanger Evaluation Clinics AdvertisedHave you seen the Hanger Patient evaluation clinics and how they are promoted and advertised in local papers around the country? They have been advertising in my area and I find the adds to be a direct attempt to get work from the independents. They say that it is a free evaluation to make sure that you, the patient, are getting the best fit and function possible and that you will see a national specialist. They invite you to an office for this opportunity to mingle with other patients and see the experts. They are trying to pick off patients that are being seen by other companies in the area. I have never seen another health care company use this sort of tactic to increase their business. I see other adds in the papers from other industries like used car sales and real estate companies but never another health related company. This is as low as I have seen in this industry but what is even more mind boggling to me is that these same independents that are affected by these clinics Hanger offers will still support Hanger by purchasing from SPS or being hooked up with Linkea. This is what Hanger will do for the independents. They will host one of these in your area and then take whatever they can from you and then ask you to join Linkia or purchase from SPS. It does not make any sense to me. Thanks for having an outlet that independents can expess concerns. What is your stand on these tactics and do you think this is worth posting on your site. I wish to remain un named because of the competition in my area and do not want any of them to know who I am. Thanks again, Name Withheld Friday, September 29, 2006Access CIGNA Transition of Care Request FormA number of providers have asked about the CIGNA Transition of Care Request Form for patients that wish to continue to receive care from their formerly CIGNA contracted provider rather than being required to move to a Hanger facility. I understand that the issue of new patients is a larger issue, not addressed by this action. I have provided a copy of this form on my website (www.gottrys.com and click on Resources) as well as my completed request form and letter if anyone wants that information as a guide. I am optimistic that my request will inevitably be approved! Good luck in this endeavor. If you have success, drop me a note!! Dan Thursday, September 28, 2006Administrative Fees Cover Losses by Hanger ProvidersContinuation of care seems like a slick way for Cigna to sidestep the complaints from their decision and play right into the hand of Hanger inasmuch that no "new" work will be coming through the door. Continuation of care should read "Choice of Care." While I am at it, there seem to be other problems with this picture inasmuch that Hanger owns Linkia. Who will control what reimbursement rates are established for each independent provider and for each Hanger provider? Does anyone think there will be fairness with this? Or, is the Linkia processing (administrative) fee high enough to cover Hanger's loss of revenue from deep discounted O&P services and provide Linkia with an attractive bottom line that shores up the P&L statement of Hanger? If so, then in my opinion, it becomes all about administration and the bottom line, and little about the health care for which the administrative wing exists in the first place. I think I knew that was coming anyway. At least for the past few years, it sure seems that way. Regarding contracts. Federal law allows for a reasonable profit for services rendered with any federal contract. If it can be shown that a reasonable profit is not being made (which I believe is possible) with the O&P reimbursement rates that are being handed out by Cigna, Anthem, and other health carriers, I believe we could at least get the attention of the federal government. After all, when providers will not or cannot provide health care services, the costs associated with these services are frequently shifted to the federal governement, via emergency room treatments, via Medicaid, etc., etc. In essence, it seems like the trick these days is for private insurance carriers to shift their costs back to the federal government, when they can. Smart thinking as long as it will last. Wil Haines, CPO/L Wednesday, September 27, 2006Need For Appropriate CredentialingDan, I would like to commend you on your vigilance in alerting the O&P community of challenges you are encountering as an amputee and Linkia. I do have a concern regarding the Industry Response #11 and the amputee who is being cared for by the CO. In my opinion it is a disservice to the amputee being cared for by this CO and to this CO's professional colleagues that this CO has not pursued credentialing to become a Certified Prosthetist. The analogy to this is that of someone hiring a plumber to do their electrical work. It is damaging to this profession and to the amputee, that a Certified Orthotist provides an amputee their care via Orthotic Credentials without ever perusing or passing their Prosthetic credentialing. I would hope that in this age of scrutiny our profession is undergoing, that amputee and O&P clinician together fight, for appropriate credentialing when caring for the person seeking O&P care. Sincerely, Name Withheld Put Your Money Where Your Mouth IsA lot of people are discussing Hanger/Linkia. How many of you have put your money where your mouth is? Are independents still purchasing from SPS? Are individuals joining together in strategic efforts against Hanger and Linkia? It is time to take action rather than sit back and whine. I would like to hear ideas as to how individuals are responding? Eric S. Eisenberg M.S.;C.P.O. Monday, September 25, 2006Silently WatchingHi Dan, I've been silently watching the festivities about the Linka/Hanger - CIGNA deal. I think that you've done a remarkable job employing your blog on this subject. Keep up the good work. I'm glad to see a patient become proactive in this fight. Name Withheld Sunday, September 24, 2006Patient "Touches" CIGNA RepI am in the midst of a similar situation [to yours] with a patient of mine, a BK. She was an old patient of mine that recently found me again. For the past 2 years I have been a Cigna provider and administered great care of her. Prior to her finding me again, she was a Hanger patient and was so displeased with her care. When I received notification from Cigna stating that my contract was being terminated as of 10/1/06, I imediately got her on the phone and explained the situation. I could imagine tears running down her face, and the anguish in her voice. I suggested that she call Cigna and voice her anger. She did indeed. She called back several hours later and detailed her conversation. Obviously the Cigna person, medical manager, on the other end was touched and concerned. The Cigna manager said that she was mailing a "Continuation of Care" form to my patient for her to complete and return. Have you ever heard of the "form". I have yet to see it , but will report back after my patient receives this form. I am both curious and amazed that Cigna reponded so quickly. Maybe they have received complaints similar to mine and beginning to address it. Let's hope for the best. Sincerely, Name Withheld Saturday, September 23, 2006Hanger Won't Stop Until it has All the BusinessDan, I am glad that you are helping with the cause of containing Hanger and their monopolistic quest of the O&P industry. This is a company that thrives on gaining markets and driving out competition. They will not stop until they have all the business in the US. What bothers me and what I dont understand is why so many indendents support this company. Hanger was formed by independents selling out and cashing in. Now Hanger has a huge network of practices and they have the other sides of their business in place with sps and linkea. This will only further their ability to dominate this industry. Why do so many independents support Hanger by buying from sps and by signing with linkea. They need to understand that by doing this they are contributing to Hangers success and sooner or later Hanger will cut them off once their goals are met. Thanks for your support. Name Withheld Friday, September 22, 2006Independents in Poor Position for SurvivalDan Jim's response is right on target. ANY indepedent O & P practice that is not ABC Certified or a member of OPGA/Point is in a poor position for survival in the current and future climate. Name Withheld Thursday, September 21, 2006Submit to Justice DepartmentDan, Hmmmm. Something smells pretty fishy. I am currently compiling copies of all letters submitted to the LIST which I may submit to the Justice Department. I hope that you and others might also do the same thing. Hanger used to be a good company, but apparently things have changed. and there will be no winners in this scheme. Name Withheld Independents Can PrevailMr. Gottry, As a buisness owner, technician, and future practitioner I would like to say thank you for taking your time to investigate the industry but more importantly to share it with the rest of us via the OandPL. I have read many articals on your website, and I firmly believe that people like you will ultimatly help the independents to prevail. Thank You for your time. Name Withheld Wednesday, September 20, 2006Insider Trading InformationA great deal of information has been communicated recently about Hanger Insider Trading, including a link to the Yahoo sight that provides a two year history. I compiled a little summary on this, showing insider trading by individual. It was interesting to note that, during this period, cash sales seem to exceed cash purchases by this group by just more than $9,000,000! Another prosthetist also just shared their strategy for dealing with the Linkia issue ... that being to allow them to face the inadequacy of their network in providing the services that they have committed to in their new contracts. Both this response and the summary of trading can be seen at www.gottrys.com/about/ ! Dan A Cynical PerspectiveI have read with interest the ongoing Linkia/Opnet/Cigna postings. Follows is my somewhat cynical perspective. Lets' look at this from the insurance company perspective. Perhaps it is Cigna's strategic intent to rid themselves and their plans of "adverse selection beneficiaries". This means they want to rid themselves of the high-cost beneficiaries. Amputees and other disabled populations fit this description. Amputees frequently have multiple other health issues and have a high incidence/frequency of health care resource utilization. So.....if they (Cigna) severely limit access to providers, maybe those high cost beneficiaries just might get fed up and leave Cigna. They might then enroll with a plan that offers easier provider access and more open choice. Cigna just solved their problem - having too many patients that have a high utilization rate and improvement their bottom line. (Every insurance benefit dollar that remains unspent flows directly to Cigna's bottom line - with no increase in admin costs or fixed internal overhead costs and no reduction in premium! Shareholders smile!) Linkia now becomes stuck servicing a low paying plan with decreasing member enrollment as beneficiaries jump to other carriers. Since O&P represents such a small percentage of the health care dollar it is an easy target. Unfortunately O&P is not a benefit that can be deferred. Services will remain necessary to the patient and will be provided at a later date at higher cost. Name Withheld Seeking a Level Playing FieldDaniel I believe a key strategy in dealing with the Linkia situation is for any and all independents, if contacted by Linkia, REFUSE to join the network. Although there are hundreds of Hanger sites, the independents still do represent the majority. Linkia will not be able to provide the access to care as promised without the help of some independents, especially in rural areas. Also, it is VITAL that Parity legislation contain language that includes ANY WILLING PROVIDER. This is KEY. And, do contact your legislators AND ACA. Advise your patients who have one of these insurers to not only contact their insurer to voice their dissatisfaction, but more importantly contact their EMPLOYER, many will be willing to investigate alternative insurance companies. It is time that everyone gets on a level playing field, Linkia who's strategy may be questionable, and CIGNA and GREATWEST, who view patient care as a "bargaining chip". If the outcry is loud enough from every angle, we can prevail. Over the years, tbis industry has, to say the least. not been a unified group. THIS MUST CHANGE NOW!!! (Before it is too late) Eileen Levis President-Orthologix Tuesday, September 19, 2006What Does a Real Network Look Like?Dear Dan, I continue to be impressed with your pinpoint accuracy identifying and exploring the issues surrounding the decision by CIGNA to implement a "network manager" which competes with the additional providers it is charged to "manage." I have also been overwhelmed by the number of positive responses I have received from my previous post. Before I respond about how OPGA/POINT conforms to your criteria, let me first say that although I do see the monopolistic arguments, what independents really need to do is compete. Independents dominate this industry, and we at OPGA/POINT want it to remain that way. There is a place in the business strategy where independents can employ networks to compete effectively. So why has Linkia obtained the CIGNA contract? I believe that answer lies essentially in geographic coverage and practice locations. The independents have waited and are acting in a "reactive" rather than "proactive" manner. They are allowing the leading few to direct their future. Due to lack of participation in our network by Independents, Linkia offers larger geographic coverage. The majority of Independents have waited for the impact of Hanger's Linkia division to result in the termination of their Independent/Direct CIGNA contracts BEFORE considering whether they should support and have available a network to compete with it. You will hear many Independents bemoaning that the national, publicly traded organization has such power and influence over its trade organization, credentialing organization, the largest patient organization, the lobbying groups, and to a lesser extent, even the academic organization. But, to be fair, all these organizations are pressured to behave as their major funding sources request. At the same time these Independents will explain why they won't pursue ABC Facility Accreditation, or join a network such as OPGA/POINT, AOPA or support ACA, then, after neither actively funding nor contributing, in a "self-fulfilling prophecy" scenario, now the supporting entities don't deserve their support. They will tell you that same national, publicly traded organization offers them the lowest prices as a distributor through their wholly owned SPS division and has terrific service. Does this justify throwing them financial support in the form of contributing revenue to their bottom line, which they can funnel to the less profitable segment of their COMPETING service provider business and take that away too? I believe each Independent practice has the responsibility to put together a business plan, and to make logical decisions that support the strategies they decide to employ in their plan. To the Independents, I ask, "If Linkia is successful and if this service delivery model rolls through the industry, what happens to your practice? If you maintain total "independence," never engaging your practice in any collaborative efforts and Medicare competitive bidding is successful, what happens to your practice?" I find it disheartening that a larger percentage of the industry is investing in their competitor, as is evidenced by the growth of the SPS division in each successive quarter of HGR earnings reports, than in their own industry organizations, or in a competitive network. Should this be part of your business plan? Our network vehicle will allow Independents to compete and access some major managed care payers who seek network services, as well as compete for Medicare "competitive bidding" contracts, and to obtain competitive pricing for supplies and componentry. Dan, I was equally impressed by your identification of the key elements of a network manager model that would meet both the provider and payer needs. I know you have little interest in researching and determining our value, but want to assure you that OPGA/POINT agrees with and does adhere to each of your 3 key elements of a non-biased "network manager." Given how long and carefully we considered what was "essential" it is admirable that you came up with it in your response to Smithson's listserve post. Regarding your criteria: 1)Please understand there are on-going debates about the Prosthetic & Orthotic credentialing standards, credentialing entity decisions and the value of the various benefits associated with credentialing. From the inception of organization, POINT has adhered to requiring the highest available credentialing standard for Prosthetics & Orthotics, which is ABC Facility Accreditation, fully recognizing that accomplishing this standard was an additional expense, completely voluntary and NOT required to obtain managed care contracts. It does not result in any economic benefit in the form of higher reimbursement or advantage in obtaining insurer participation contracts; yet the network founders believed it was an important demonstration of the Facility's commitment to quality and differentiated the Facility as being of highest quality. 2)The POINT fees were determined by the founders of POINT to fund the operations of the initially provider-owned network. At the time of sale of the network to VGM, due to economies of scale, these participation costs were actually lowered for the participating facility. If providers need comparisons, our fees are outlined at http://www.pointhca.com under the "Join POINT" tab. 3)Although the provider-owned network in its early years entertained many on-going debates about whether the network should be "inclusive" or "exclusive" the leadership took the high road and chose the "inclusive" route, even knowing that the few who had invested shareholder dollars (well beyond the current member dues/withhold amounts) and been proactive in their quest to meet the foreseen service need have borne a much larger portion of the costs to create the network. In closing, the vehicle that will allow the independents to compete is already in place. It is now time to choose the strategy that will best fit their business plan. Jim Andreassen President, OPGA CIGNA Exceptions?As per Mr. Gottry's recent postbelow, it is my understanding also from recent communication with some independent providers, is that there does seem to be select exceptions being made by Cigna to allow other independents providers to stay in the network but they must contract with Linkia on a year to year basis so longevity is not quaranteed. This is a little strange since the location, and the service provider area does not seem to be an issue when in one of these cases, a Hanger facility is less than a mile away from the independent provider who was permitted to remain in the Cigna network. The exception, in these cases, seem to be made as the result of outcry directed to Cigna from Cigna patients AND their independent Cigna providers. Anthony T. Barr Can Hanger Handle the Volume?Dan, If Hanger succeeds sooner than later with more national contracts, as long as we independents don't help Hanger out by accepting their (Linkia) contract offers, I can't imagine how they could possibly take decent care of all of those patients. I think it will be a shorter rough road for all of us AND our patients, as long as we all refuse to help them transition to this new volume of patients. Name Withheld Monday, September 18, 2006National Contracting with Linkia "Frightening"To my esteemed colleagues, It's both interesting and rather frightening to read about national contracting exclusively with Linkia. Just the other day, I received notice from Great West that they are ending their contract with my company as of October 31, 2006. I have not called then yet to inquire, but I fear that Linkia may be involved. As an independent provider of O and P, I wonder about the options. One that continues to bother me is why no one has proposed a class action lawsuit based on Hanger and Linkia forming a monopoly in this aspect of health care. I realize that Hanger pays more to lawyers than my meager company brings in per year and they have undoubtedly reasearched this, but if they do create a monopoly, I believe there are grounds for legal action. Any smart lawyers out there interested? I'll sign up. Karl Entenmann, CPO Stiking Fear Into Hearts of IndependentsWith all the contraversy and discussions about Linkia, one particular trend should strike fear into the hearts of all independents, their patients AND may have implications for the FTC. The implementation of taking over the Cigna provider network has been completed and termination letters have been sent to the providers that will not be in the network. Linkia is working with Cigna on building out the new network. They have also signed a second provider, Great-West Life and Annuity Insurance Company for their network management agreement for their 2 million members. Linkia is currently in discussions with all of the large regionals or national healthcare insurance and health management firms in the USA. I wonder whether Cigna and Great West Life realize that millions of their policy holders are being treated by unlicensed and in many cases non-certified individuals providing O&P services in 39 states? Where is the newly formed O&P Alliance and the Academy in all this? Do these organizations represent the interests of independents? Is this issue not worthy of them to provide a position statement to their members? With all this occurring it is interesting to see from Dan Gottry's recent post "Hanger CEO Dumps Large Block of Stock" and Karl Entenmann's, CPO post "Linkia and Independents " as further reported on the link Hanger CEO Dumps Large Block of Stock that Hanger insiders are liquidating stock holdings. Anthony T. Barr Hanger ... "Prescription For Fraud?"[The following are News Articles/Press Releases About Pending Hanger Litigation] Recent News Prescription For Fraud? NewsChannel 4 Investigation UPDATED: 1:57 PM EDT June 15, 2004 The country's largest supplier of prosthetic limbs is facing investigation for allegedly stealing from Medicare, Medicaid and insurance companies. NewsChannel 4's Tim Minton Reports An insider at Hanger Inc. is speaking out, and the company acknowledges an internal audit is under way. The insider says company policy amounts to a prescription for fraud. She says thousands of patient files are forged or nonexistent. None of which, she claims, stops the company from billing taxpayers for medical devices that may or may not have been delivered. Some of Hanger Inc.'s prosthetics were on display Monday night at a conference for medical professionals, including shoes for diabetics and limbs for amputees. It's a multimillion-dollar business. But according to Hanger employee Kendall McDaniel, the money's often paid for nothing at the company's Long Island division. She should know. She's in charge of processing patients' bills. "They'll come in with, say, a prescription for shoes," McDaniel said. "And they'll either get the shoes, but then their insurance company will be billed for shoes and additional items. And then I'm saying that there may be no patient at all. Just a fake name." The rules for reimbursement by Medicare, Medicaid and insurance companies are strict and specific. A prescription signed by a doctor is required. And so are notes that justify why particular equipment is necessary, given the patient's diagnosis and condition. McDaniel says blank Elmhurst Hospital prescription pads and official insurance company documents are kept at the Hanger office -- where she says she's seen a manager fill them out. "Not only prescriptions, [but also] Medicare suppliers' standards," McDaniel said. "Things that need to be in a chart in order to bill out to Medicare are just signed as if a doctor was signing them on a day-to-day basis." In a statement released Monday night, the New York City Health and Hospitals Corp. said: "This matter appears to involve the theft and fraudulent use of hospital prescription pads without any knowledge of Elmhurst Hospital or the physicians whose names were used." The whistle blower says she has hired an attorney, Kenneth Mollins, to make sure she can keep her job and follow the law. Mollins sent a letter to federal and state prosecutors, requesting they review Hanger's files. "So that they can investigate whether or not millions of dollars in fraud is taking place, and whether it's isolated to this one office, or whether or not it's nationwide," Mollins said. Hanger's response: "The company is adamant about compliance. We are conducting an internal audit. If there is something that is done inappropriately, there will be strong and immediate action." But the results of an internal audit conducted last summer and obtained by NewsChannel 4 shows that all 15 files checked had problems complying with the law. Issues ranged from no prescription to no justifying notes. Overall, the company's own auditor gave a failing grade -- 50 out of 100 -- with 80 considered compliance. In a follow-up this February -- seven months later -- the auditor sent an e-mail to company officials warning: "I am still very concerned about the integrity of the documents I have received ... there remain numerous altered documents." "I worked for WorldCom," McDaniel said. " I got fired -- or laid off -- due to fraud. The biggest fraud in the history of the country. I've been through this. And I don't want it to happen again. Maybe I can stop it and tell people. And maybe somebody else will come forward." McDaniel has been placed on administrative leave with pay until Hanger completes its internal audit. The company says it has reassigned a manager implicated in forged prescriptions and other alleged fraud to a job where he can be more closely supervised. ------------------- NEW YORK--(BUSINESS WIRE)--June 22, 2004--Fifth graph, first sentence of release should read: If you bought the securities of Hanger between July 29, 2003 and June 14, 2004 and sustained damages, you may, no later than August 23, 2004, request that the Court appoint you as lead plaintiff. MILBERG WEISS ANNOUNCES THE FILING OF A CLASS ACTION SUIT AGAINST HANGER ORTHOPEDIC GROUP, INC. ON BEHALF OF INVESTORS The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed on June 22, 2004, on behalf of purchasers of the securities of Hanger Orthopedic Group, Inc. ("Hanger" or the "Company") NYSE:HGR) between July 29, 2003 and June 14, 2004, inclusive, (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss's website at: The action, numbered 04 CV 42585, is pending in the United States District Court for the Eastern District of New York against defendants Hanger, Thomas F. Kirk, George E. McHenry and Ivan R. Sable. Hanger describes itself as "the world's premier provider of orthotic and prosthetic patient-care services." The Complaint alleges that, throughout the Class Period, the Company performed poorly and that defendants were under tremendous pressure to meet the expectations they themselves had set and thereby maintain their credibility. The complaint further alleges that, to achieve this end, they resorted to an illegal scheme to bilk the Medicaid and Medicare programs, the Veterans Administration and private insurers. Specifically, unbeknownst to investors, during the Class Period, Hanger improperly booked sales by filling out fake prescriptions and adding items that were not prescribed for existing patients in order to increase bills to Medicare and Medicaid. This practice not only artificially inflated Hanger's revenues and earnings, it also jeopardized Hanger's status as a Medicare and Medicaid provider, and its relationships with private insurers. It was, therefore, highly relevant to investors seeking to evaluate the effectiveness of the Company's operations. The truth began to emerge on June 14, 2004, after the close of trading, when NBC News aired an investigative report in which a Hanger employee described the Company's allegedly fraudulent billing practices. The next day, the Company issued a news release over the PR Newswire in which it admitted that the Company had initiated an investigation into "billing irregularities." The Company's shares had opened on June 14, 2004 at $15.75. They closed out the day at $14.41 and fell to a closing price of $12.75 on June 15, 2004 onheavy trading volume of 2.4 million shares for a two-day drop of 19 percent. If you bought the securities of Hanger between July 29, 2003 and June 14,2004 and sustained damages, you may, no later than August 23, 2004, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action. Milberg Weiss Bershad & Schulman LLP http://www.milbergweiss.com is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, Seattle and Washington, D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys: Steven G. Schulman Peter E. Seidman Andrei V. Rado One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 Phone number: 800-320-5081 Email: sfeerick@milbergweiss.com Website: http://www.milbergweiss.com Friday, September 15, 2006Let Linkia Bog Itself DownWell done Dan. Your points are good. You left out the fact that Hanger does not have the available infrastructure so support these contracts. I say let Linkia bog itself down with a huge patient load at 50% off MC and leave the rest to the independents. Name Withheld Please Hold ... Your Call Will Be Taken in the Order ...[E-mail Response from Department of Justice to Complaint Posted on Their Website] Thank you for contacting the Department of Justice. This is an automatic acknowledgement that your e-mail was received. It will be reviewed in the order it was received. Provider Seeks to Provide "Ammunition"Hey Dan, I am fully supportive of what you are trying to do here. Grassroots from patients, particularly the Cigna patients, is probably the only way to correct this. I'd like to give you some more ammunition, but must do so in confidence for reasons I won't go into. The phrase "cost-effective healthcare" came up a number of times in Cigna's communications. It might interest you to know that the contract Linkia negotiated was absurdly low, lower than most state Medicaid reimbursements. I'm sure you've heard all the buzz about the compromised quality of free healthcare. Well, the premiums you're paying Cigna for will buy you care that is reimbursed at an even lower rate than the free stuff in many instances. The rates are so low that one Hanger office manager, only partially joking, asked his local Cigna case worker how he could reduce the number of Cigna referrals that were sent his way. These Hanger clinicians will likely have a hard time finding any profit margin given what they are being reimbursed, and the temptation to compromise care in reduced follow-up care, or less expensive componentry will certainly be present. Your Burger King analogy wasn't far off. Hanger clinicians are "strongly encouraged" to not use other, higher priced items. The extent of this "encouragement" has caused many clinicians to leave, the organization. You might also find it interesting to know that it is quite rare for a Hanger clinician to attend the annual educational meetings of the American Academy of Orthotics and Prosthetics. Instead, they all attend their own, Hanger Education Fair, where they are presented with only the technology and subject matter that Hanger invites to attend and where as much time is spent on maximizing profits as on enhancing patient outcomes. So you have every right to be concerned. There are some good clinicians within that organization, but there are some bad ones as well. And for the most part, patients will only have one office within reach as Hanger operates quite efficiently in this regard. The serpent has many heads. If you can cut of one of them with this Cigna-Linkia fiasco that saves Cigna a bunch of money, gives Hanger something to show their stock holders and compromises the quality of care for all policy holders, I wish you the best. X-Hanger Manager's 2 centsDan Just wanted to say good job and good luck with your Cigna fight. I'm one of many X-Hanger Managers as well as clinician and wish you the best in your efforts for amputees everywhere. If there is a Cigna email address to write in this regard I'd be happy to put my 2 cents in. Good luck! Thursday, September 14, 2006Forward to Justice DepartmentDan, Great information! Thanks again. Do you think any of this should be passed on to the Justice Department? It seems clear that there is a serious problem here and that there will be no winners if this situation (scheme) comes to full fruition. Name Withheld Wednesday, September 13, 2006Limited Provider Choice Impacts PatientsSusie Ebersbach of POINT Health Centers of America, Inc. has accurately provided excellent input to the short longevity a independent provider could face if this national O&P contracting assault by Linkia is successful. However, the patient of these services is also negatively effected with the impact of such a consequence and to their future choice of providers. All patients of comprehensive O&P care should be active participants in their medical care and should contact their health care providers opposing exclusive contracting resourcing. Every provider should encourage their patients to have open discussions with their health-care providers about the proposal and the severe limitations incurred of national contracting to Linkia and ONE managed healthcare provider network. Most of you, as independent providers, have formed special alliances,friendships and professional relationships with your patients for years. Inform them of what is occurring here and that if they don't react you may no longer be able to be their provider. Ask them to call their insurer. Once they are properly informed,that under this scenario, if successful, they may have no longer have access to your professional care and the thrust of this consequence is not only felt by you, but also by them. Inform them of what is being proposed here. Pressure ACA (who is partially funded with tax payer dollars to represent the needs, to educate,empower on behalf, and to advocate, for all amputees), Multiple Scoliosis, Spina Bifida, and other national associations representing the handicap, what is at risk and to oppose national O&P contracting with ONE primary management network of O&P providers. Patients also most play a role in their health care future. Anthony T. Barr President Barr Foundation POINT Healthcare Weighs in on LinkiaI have read all the responses to the Smithson "National P&O Contracting" post and noted there is a very basic concept no response has specified, though several have come close, and I fear it is so basic we may believe it to be common knowledge. You won't often see my opinions on the list-serve, though I read it faithfully and am regularly influenced by all of yours. If, in fact, there is an "advisor" to major insurers in the U.S. out there with a lack of understanding of this key capitalistic concept, then I would hope this response will help clarify and educate. In my opinion, here is the fundamental concept lacking from the "National P&O Contracting According to Smithson" post.... Yes, it is true that managed care insurers desire to lower their costs of administration, just as providers do, by streamlining contracting, credentialing and service location management functions. (What is still ripe for debate is whether these costs are lowered, or simply deferred to the provider). At any rate, insurers may be in the market for network services. Yes, it is true that both Linkia and POINT (not OPGA-which does not contract to service managed care organizations) strive to provide these same benefits to managed care insurers. The key difference between the POINT network (owned by VGM) and the Linkia network (owned by Hanger) is that VGM does not own, or intend to own any service provider locations. Therefore, it does not intend to move market-share, via POINT, to VGM. The fees to operate the network are similar, but POINT does not take the service provider portion of payment home to its bottom line. The same cannot be said of Hanger, who clearly operates Linkia to gain market-share through Linkia, and intends to move as much service as possible to its Hanger service centers. This makes the liaison between CIGNA and Linkia/Hanger monopolistic/monopsonistic in the view of independent providers and of mindful patients. It poses an inherent threat to the independents survival and only an independent company that is willing to turn its business over to its competitor would logically cooperate. If this model is expanded, patients will ultimately suffer. It's not purely a matter of the number of providers in each network, the core issue centers around the ownership of the service locations the contracted entity will naturally prefer to send insureds to for service, and the long-run impact the gradual shift to a single provider will have on the industry. This may not matter to the insurer, but it is of critical importance to the survival of the independent provider. Regards, Susi Ebersbach Director of Business Development POINT Health Centers of America, Inc. Monday, September 11, 2006Linkia May Have to Swallow Promises[The following is a response to questions posted to the O/P Community] I must say I was rather impressed with most of the responses to a rather naive and somewhat inflammatory statement made by Smithson. To attempt to imply that a socialistic model is "obviously" superior to our current system at best illustrates a lack of understanding about O and P in the U.S., and is evidence of her remarkable lack of insight into the Linkia effort, and its intentions. My guess is that Linkia will ultimately have to swallow many of its promises of improved outcomes over the independents, reexamine its discounting policies if it is to remain a viable entity, and prepare for a renegotiation with Cigna as patients fight back. In the past, patients simply did not have as great a forum as they do now, so it is understandable that many of you clinicians feel they may not have much of a collective voice. To a certain extent this is true, but after all the togetherness I've seen on the various listservs among these individuals over the last few years, their power is growing. Concentrate on systems designed to document outcomes (outcomes measurement is our Achilles heel and your biggest competitor knows it), ensure you have superior results, and hold the line like many of you have already done when you are asked to lose money in order to maintain a contract. Talk to your patients, ask them if they network among their own and give them some links to existing listservs that will allow them to gain motivation and strength from others in their situation. They are bound to have friends that are insured through Cigna. Get the ball rolling by urging them to contact Cigna supervisors to state their objections and there should be some light at the end of the tunnel. Randy Randall D. Alley, BSc, CP, CFT, FAAOP Saturday, September 09, 2006Provider Turns Down Linkia's "Offer"We were recently contacted by Linkia to SIGN UP as a provider. We have been a Cigna provider for about 10 years. They sent us a contract with a price list. In most cases the Linkia was 50 percent or less of the current medicare allowable in my area. In fact there were numerous items BELOW my cost. Thats right below what I can buy it from any supplier including SPS. I asked if they would accept a contract with caviats, the answer was that no alterations or special deals were being considered at this time. There are no Hanger facilities within 300 miles of my office. The only way anyone near me could live with that contract would be to upcode. I even explained that to Linkia. I declined the contract. I further suggested that they try the guy that had to pay back nearly 2 million to Medicare. With regards to Cigna patients with whom we have a long-term relation, They have not been informed by Cigna and when they find out they are angry. Numerous patients or their parents have notified us they will be changing thier insurance plan. Perhaps if Cigna loses enough clients they will alter thier decision. I guess if you have Cigna here you'll need to hop a plane to receive service. John E. Link CO Puerto Rico Friday, September 08, 2006Take Linkia Seriously[In Response to Another Post] Well said Jim. You are right on target with your assessment of our industry and the methodology for independents to compete. We must take Linkia seriously! I see it as the greatest threat to traditional O&P in my career! Thanks for having the nerve to make such a bold statement! Ron Kidd, CPO,LPO Thursday, September 07, 2006OPGA/POINT Weighs InThank you Eric, for reminding everyone that "competition" is an American foundation, and since the entrepreneurial spirit of independents has created the service delivery system that currently provides around 75% of the orthotics and prosthetics to the U.S. market, it seems logical that a "lack of understanding" of market conditions is what could allow Hanger/Linkia to dominate. I have read with great interest, the recent postings regarding Hanger/Linkia and now feel it is time I put in my two cents worth. Although this post is a bit lengthy, I believe it is of the utmost importance that each of you on the list serve read it and form your own opinion...then the choice is yours. This post is in no way meant to be a sales pitch but an opportunity for everyone to make that choice and then to make a difference. In order to make the correct choice for you, it is necessary that you have all the facts. Independents are now forced to re-evaluate their perception that the world understands the quality of their professional services and because of that, will offer them the opportunity to continue to provide these services at traditional reimbursement levels. Economics forces tough choices when funds available are not sufficient to purchase all needs. Competition on price, while often brutal, is a fact of life. You are correct in recognizing that networks are a viable strategy for independents to compete with Linkia. OPGA, is a nationwide network of more than 1,100 independently owned and operated orthotic and prosthetic facilities. These companies have joined together to better compete in the ever-changing health-care environment. Since 1993, OPGA's original mission has been to help members receive manufacturer discounts similar to those received by multi-national companies. Such discounts provide you the opportunity to remain independent. However as the needs of the independent changed, OPGA has more recently evolved into a member service organization offering numerous other benefits including Buying group discounts from 40 manufacturers and access to HOMELINK - our managed care contract division. OPGA is owned by VGM, which also purchased the provider-owned POINT Health Centers of America network in 2004. The POINT network was founded by a proactive group of independent facilities in 1996 who recognized the economic pressures of the healthcare industry would force consolidation and reimbursement reductions, requiring independents to lower their costs through economies of scale and through technology. More efficiency was absolutely required due to the ever-increasing administrative burden of operating an independent practice. Paramount in accomplishing these objectives is the need for "state-of-the-art" information technology and information management systems. Because these skill sets and programs already existed "in-house" within the VGM group of companies, POINT owners determined they would be better positioned by seeking an affiliation with VGM. HOMELINK is the Managed Care Contracting and Billing Administration division for the VGM network. HOMELINK also administers billing for O&P managed care contracts accessed by both the OPGA and the POINT divisions. POINT's mission statement has remained the same, post integration into OPGA. "To provide select, ABC-accredited, independently owned orthotic and prosthetic facilities a vehicle to compete and prosper in today's rapidly changing healthcare environment thru participation in a national network of facilities which purpose is to obtain and retain capability to provide top quality orthotic and prosthetic services to patients in need while continually improving operational efficiency and cost effectiveness." The OPGA/POINT objectives are exactly what Eric suggests in his post and are the expressed mission. The tireless efforts of the OPGA/POINT network founders to build and maintain a network of independents created a vehicle that is now poised to benefit many of their colleagues who did not foresee or accurately predict the changes in the O&P industry. Linkia's recent success in extracting important market share from independents and the upcoming plans for competitive bidding on the Medicare front, indicate the time for independents to network in order to better compete has arrived. The work is begun, but not completed. POINT currently has 235 ABC-accredited locations. Combining OPGA and POINT now accounts for more than 1,300 independent orthotic and prosthetic locations compared to Hanger's 600+. Independents have wanted the network to get the contracts BEFORE they join, again wanting someone else to lead the effort then participate AFTER benefits are received. Although they would independently be unable to get a managed care contract directly from a payer prior to actually having a service facility location, they somehow believe the network should be able to do it. You don't get a free ride. You should not expect to just pay some Member dues and automatically reap the benefits. We are a young organization and the Members have to participate, communicate, cooperate and give meaningful feedback on the organization's performance for continuous improvement. We need to capitalize on the data and information systems expertise we have available to succeed. Clinician input will be essential in developing the correct outcome measures and data to assemble. Likewise, once deciding to participate, Members need to resist offers to break rank with the Network strategies on contracting and purchasing in order to gain short-run more favorable terms. These "network-busting" measures are a tactic to prevent the Network from achieving the goals you want it to accomplish. To succeed, the Network needs symbiosis with the Independent Facilities. I don't believe this can be achieved by cooperating with an entity that competes with you. Active participation by a handful of independents is the reason this network is here for you today. Our industry is plagued by participants who fail to fully educate themselves on all the critical aspects of their field yet are still willing to complain when they don't like the outcome for their business. Independents (who by the way still dominate the industry in numbers) have allowed Hanger to fund all the legislative efforts, dominate the donations to the patient organizations, trade organization, credentialing organization, etc; Independents will purchase supplies from Hanger/SPS, service contracts through OPNET or Linkia; and then cry "unfair" when they lose industry control and market share to companies that are not able to match the high quality of O&P services that Independents are best capable of providing. The time to be educated and get involved is NOW. You must compete! Independents do need to look carefully at the market conditions of their industry. To unite in a network is one strategy available to include in your business plan. The network will not alleviate your need to continue to be active in "knowing your industry" and making appropriate choices to ensure you don't give your business to a lesser provider by failing to understand the implications of business decisions you make. CIGNA claims it has undertaken this Linkia contract initiative in response to a need to control its costs. While I disagree with the wisdom of CIGNA's move and its active participation in encouraging Independents to service patients via a competitor that aims to capture market share for itself at the expense of Independents, the choice of "not following the wrong gods home" is up to the Independent provider delivering services to Members. Independents are free to choose if they will service CIGNA insureds when no alternative service avenue is given, just as independents also make the choice whether they will purchase supplies through SPS, thereby supporting the profitability of an entity bent on taking away their market share. The competitive strategy pursued by each Independent practice is a choice. I hope all Independents will see the whole picture, check out the OPGA/POINT networks and become actively participating Members. WE HAVE AN OPPORTUNITY TO MAKE A CHANGE NOW, but we must all band together to make it happen. Jim Andreassen President, OPGA/POINT Contact the Justice DepartmentDan, I've never met you but have to applaud your efforts at exposing the XXXXX that is about to befall upon our industry and shortchange so many patients who will need the professional services of clinically educated and credentialed practitioners. I do hope that someone might forward the posts to the O&P LIST as well as the responses you have received to the Justice Department in Washington for their review. There is no good that can come from this scheme. Name Withheld Wednesday, September 06, 2006Ex-Hanger Manager Supports CIGNA FightDan Just wanted to say good job and good luck with your Cigna fight. I'm one of many x Hanger Managers as well as clinician and wish you the best in your efforts for amputees everywhere. If there is a Cigna email address to write in this regard id be happy to put my 2 cents in. Good Luck! Name Withheld Friday, September 01, 2006Linkia Needs A Little SunshineThere a twist in the Linkia set-up that needs a little sunshine. We have a very similar problem here in Michigan with Wright & Filippis and DMEnsion (formerly ABP Administration) that has caused me to think about what is happening here. This type of claim management contract is great for the corporations bottom line but that extra profit comes out of the pockets of their practicitioners. What the corporations have done is transfer any profit that might be made in the delivery of service from their clinical division to their administrative division. This is done by lowering the reimbursement paid to the clinical division for the services and retaining the margin in the fees paid to the claim administration division. This allows the corporation to make increased profits while cutting sales bonuses to their staff and crying poor and pointing to dropping office sales when it comes time for raises. If I was a Hanger employee I certainly would not be enthusiastic about Linkia signing up more subscribers. Ted A. Trower C.P.O. Linkia & ParitySince the O&P list serve is a valuable and open forum for everyone's thoughts and ideas, here is my spin of the dilimma the profession and the end users are facing, whether you label them patients or consumers.. I hope I don't alienate my good friends at Hanger,AOPA,ACA and SPS with conveying these thoughts and suggestions. The longevity of independent providers and the patient's FUTURE choice of providers, are at stake. Sadly, I believe ACA is advocating ,or at least opening the door, for Hanger/Linkia, in what maybe their sincere efforts, to better ensure prosthetic rehabilitation benefits, by supporting prosthetic parity laws in over 12 states. Mostly unregulated states I might add, so providers would require no educational qualifications or credentials if those laws were passed.. ACA supporters and members believe this parity legislation is mainly focused to mandate proper prosthetic benefits for amputees so they are all for it. Under that veil, however is the Hanger organization and its wholly owned subsidiaries Linkia/SPS ability to contract both prosthetic and ORTHOTIC services with insurers whom must now be forced by law to provide benefits. The O comes with the P from most underwriters and Hanger is positioned to offer the lowest cost of services. Enter Linkia and their ability to provide "network management contracts" thru 630 + Hanger providers. They can undercut any other provider in the system since Hanger also own SPS and Hanger's cost of goods is deeply discounted. In the recent past we have corresponded with ACA that the Barr Foundation would like to consider supporting parity in Florida and any other REGULATED state, but only with patients having the ability to choose a licensed provider. Parity is a ACA/AOPA /Hanger driven and funded effort, many independents in Florida see supporting parity as the beginning of the end of third payer provider contracts for them since Linkia/Hanger would be able to more aggressively bid for the contracts if insurers are legislatively mandated to provide appropriate O&P benefits. Review AOPA's publication, the O&P Almanac issue, May 2004 pp10-13, Carrie Parsons wrote Hanger forms MCO to Link Facilities and Payers for discussion that Linkia is "good for the industry"! The result is that you may have the deck stacked against you with the largest provider network (Hanger), the national O&P trade industry(AOPA),the nations largest distributors of O&P components(SPS), AND the nations largest amputee patient non profit organization (ACA) effectively supporting Hanger/Linkia thru their parity initiatives efforts, funded with Hanger and industry $$$, to legislate state parity laws. Ivan Sabel, Chairman & CEO, Hanger Orthopedic Group. Reported, "We also recently announced a Linkia contract with Great-West which will go into effect August 1st, and coupled with our Cigna Linkia contract, we now have two full network management contracts in place." There maybe only two options here. 1) Amend the parity bills with the "Any Willing Provider Law". Described below.Since it has taken effect in Arkansas, insurance companies have been forced to deal with little guys. They may not send the check directly to the provider, the patient instead, but providers will get paid. I know that it's taken effect in Kentucky where it originated,. Perhaps providers would have any interest in pursing that course to perhaps minimize that concern ? Thinking this bill might help independent providers to supporting parity laws, I contacted and asked ACA'S Morgan Sheets, if ACA could support "any willing provider" laws to their parity efforts. They elected not to stating it would be sending mixed signals to legislators in proposing two bills. http://www.benefitscounsel.com/archives/cat_any_willing_provider_laws.html 2)File a complaint to the FTC re: possible violation of monopoly laws. A monopoly is Exclusive control by one group of the means of producing or selling a commodity or service: "Monopoly frequently . arises from government support or from collusive agreements among individuals" (Milton Friedman). http://www.answers.com/topic/monopoly-1 The adverse effects of monopolies can be much more noticeable on an individual level than in the aggregate. These effects include the destruction of businesses that would have survived had competition been based solely on quality and price (with a consequent loss of assets of the owners and jobs of the employees) and prices for products so high as to cause hardship or be unaffordable for some people. http://www.bellevuelinux.org/monopoly.html Contact FTC for their perspective http://www.ftc.gov/bc/compguide/index.htm Interview Susie Ebersbach, Director of Business Development, POINT Health Centers of America, Inc. Ask 1) What is the impact of the Linkia model on independent providers, Linkia, patients and eventually the payers? "In my opinion, should Hanger be successful in attaining full managerial contracts to control payer's provider networks, independents will lose tremendous market share, patients will have severely limited provider choice and quality of care will erode over time. The number of providers will be decreased, thereby allowing the major providers remaining to begin to demand better pricing for at least a portion of their services." said Ebersbach. "When Hanger predicts that $50M in additional revenues is possible thru its Linkia division, and yet reimbursements are dropping, then these revenues represent a shift in market share (away from the independent) and NOT growth in the total market." Asked why Independents would cooperate by participating in a model that will erode their market share, Ebersbach responded, "I have never understood this myself, so its probably more appropriate to ask the providers who choose to do this. I will say it is an inconsistent business philosophy to offer your dollars either via purchasing supplies or providing patient services through a competitor entity, if you see the entity as a competitive threat. Clearly, the growth of SPS purchases by independent facilities each quarter demonstrates those independents are supporting Hanger, and infers they do not perceive a threat. Over the years, reasons Independents have expressed to me for engaging in these inconsistent practices revolve around the belief that Hanger will never be able to provide services of the quality they are providing at their independent facility, and the belief that this will continue to translate into retained market share for the independent practice. I see Linkia as a vehicle to thwart this logic by monopolizing market share, if the MCO payers allow it." Interview a displaced patient (contact Roger Lehneis 516-621-7277. He has one who is concerned) From all what appear cloudy issues maybe a silver lining. Perhaps this could be a wake up call for patients AND independent providers not remain passive and get involved with securing, proper O&P benefits, and what very well can turn out to be the longevity of their profession and livelihood.. Have an nice weekend.... Anthony T. Barr |
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